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Why The US Consumer Is About To be Crushed: The Obamacare Inflationary Deluge Arrives
For the past three years, the biggest argument supporters of Obamacare would trot out every single time when faced with opposition to the mandatory tax, would be that despite widespread predictions of soaring prices, US medical care service costs had remained low and even, on occasion, declined (we leave aside the lack of discussion about soaring deductibles which are recurring "one-time" charges incurred whenever anyone does need medical care, and whose weighted impact on overall medical outlays is dramatic).
A big reason for this delayed increase in prices is that many insurers were unable to gauge the full base-effect impact of Obamacare on their P&L: after all, effective implementation of Obamacare had been materially delayed thus preventing an apples to apples comparison of incurred fees versus revenues.
All that changed moments ago when core US inflation finally spiked the most since 2013 driven by a 0.7% monthly surge in medical care service costs: the highest since 2007!
What's far worse for the troubled US consumer, this is just the beginning. Because after finally digesting the true cost of Obamacare, any recent insurance prime hikes will seem like a walk in the park compared to what is coming.
According to the WSJ, key insurers in some states are proposing hefty rate boosts for plans sold under the federal health law.
Case in point:
- In New Mexico, market leader Health Care Service Corp. is asking for an average jump of 51.6% in premiums for 2016.
- In Tennessee, the biggest insurer BlueCross BlueShield of Tennessee, has requested an average 36.3% increase.
- In Maryland, market leader CareFirst BlueCross BlueShield wants to raise rates 30.4% across its products.
- In Oregon, the largest insurer Moda Health seeks an average boost of around 25%.
All of them cite high medical costs incurred by people newly enrolled under the Affordable Care Act.
The irony is that while the Obama administration "can ask insurers seeking increases of 10% or more to explain themselves, but cannot force them to cut rates. Rates will become final by the fall."
Why the explosion in costs? Simple: take on look at the IBB or any other biotech index, all of which have exploded in recent years as a result of one key thing: pushing prices of medicines ever higher. Now, finally, these soaring prices which have likewise resulted in soaring stock prices, are about to be funded by everyone else.
Insurers say their proposed rates reflect the revenue they need to pay claims, now that they have had time to analyze their experience with the law’s requirement that they offer the same rates to everyone—regardless of medical history.
Health-cost growth has slowed to historic lows in recent years, a fact consumer groups are expected to bring up during rate-review debates. Insurers say they face significant pent-up demand for health care from the newly enrolled, including for expensive drugs.
“This year, health plans have a full year of claims data to understand the health needs of the [health insurance] exchange population, and these enrollees are generally older and often managing multiple chronic conditions,” said Clare Krusing, a spokeswoman for America’s Health Insurance Plans, an industry group. “Premiums reflect the rising cost of providing care to individuals and families, and the explosion in prescription and specialty drug prices is a significant factor.”
David Axene, a fellow at the Society of Actuaries, said some insurers were trying to catch up with the impact of drugs such as Sovaldi, a pricey pill that is first in a new generation of hepatitis C therapies.
Now Sovaldi has been great news for one group of consumers: those who were long the stock of drug maker Gilead. Alas, now the time has come to pay the piper. And while Sovaldi's cost at $1,000 per pill and $84,000 for a typical 12-week course of treatment, has been a goldmine for GILD, the piper's invoice will be massive.
Who pays it? Why everyone dear America. That's the magic of socialized medicine the Obamcare tax, which means everyone has to chip in for the healthcare of the few. Meanwhile, GILD shareholders are laughing all the way to the bank.
As a result, expect Obamacare premiums, which are about to spike across the board virtually everywhere, to become a key talking point:
Insurance premiums have become a top issue for consumers and politicians as they evaluate how well the law is working. Obama administration officials weathered a storm as some younger, healthier consumers saw their premiums jump when the law rolled out, but were also able to point to modest premiums overall as insurers focused on other ways to keep costs down, such as narrow provider networks.
For 2015 insurance plans, when insurers had only a little information about the health of their new customers, big insurers tended to make increases of less than 10%, while smaller insurers tried offering lower rates to build market share.
Since the insurers have now had a chance to evaluate the impact of Obama's landmark tax on the top- and bottom-line, they have decided that they will need to charge the mandatorily insured Americans more. Much more. After all, it's not like Americans have much of a choice to say no to a "mandatory" tax.
BlueCross BlueShield of Tennessee, CareFirst in Maryland and Moda in Oregon all said high medical claims from plans they sold over insurance exchanges spurred their rate-increase requests.
The Tennessee insurer said it lost $141 million from exchange-sold plans, stemming largely from a small number of sick enrollees. “Our filing is planned to allow us to operate on at least a break-even basis for these plans, meaning that the rate would cover only medical services and expenses—with no profit margin for 2016,” said spokeswoman Mary Danielson. The plan’s lowest monthly premium for a midrange, or “silver,” plan for a 40-year-old nonsmoker in Nashville would rise to $287 in 2016 from $220.
* * *
Moda Health said that with more than 100,000 individual members, it had the best data “on the care actually being received by these Oregonians. Our proposed rates reflect that.”
Under Moda’s proposal, a 40-year-old nonsmoker in Salem would pay $296 a month in 2016 for a silver plan, up from $245 a month this year. “It is a balance,” said Oregon Insurance Commissioner Laura Cali of her rate-review process.
But wasn't the Affordable Care Act supposed to make healthcare prices more, well, a?. Well no, as we have explained time and again, most recently last summer.
But the biggest irony: just as Obamacare was the primary reason for the US Q3 GDP surge to 5%, as we explained last December, fooling many pundits into believing the US economy was finally in a self-sustaining liftoff mode...
... so this year it will be up to Obamacare to single-handedly pump up core CPI inflation - that biggest missing link from the Fed's "successful monetary policy" checklist.
As for US consumers? Why, they are about to get the short end of the stick again, as any and all "gas savings" now and in the future, will be once again spent on, you guessed it, health insurance.
The problem with that being that unless oil crashes again, there are no gas-savings to be had. Which means one thing: the only thing crushed yet again will be the US consumer, that 70% component of US GDP.
But don't worry: when the US economy slows down to a crawl once more, and posts a negative GDP print this time during the summer, there will be a double seasonal adjustment for that.
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Fuck Bath Hose Barry.
My gardener took his daugther to the dentist for cleaning and extraction the other day. I asked him how much did it cost ? Nothing, he said it is free because of Obamacare. I did not want to make him feel bad so I did not tell him my health insurance premium had gone up quite a bit since that stupid Obmamcare. My son, of the same age , brushes his teeth religiously and needs no dental work but still, I paid for his checkup. I guess us serf need to pay more attention to save money so the Amigo can enjoy his life more.
You must be a YT. You must Pay for the Takers.
Very funny, most of the costs are being driven by sick-white people with their corporate private insurance, all paid for by low and middle class consumers. Who are all the sick people in the USA: the white middle class.
Your gardener?
Umm, serfs, as you call yourself, don't HAVE gardeners...they ARE gardeners.
If you can afford a gardener, you really shouldn't be complaining about benefits your gardener's child gets. What was he getting before? Were you helping him out? He works for you, right?
So, if employers aren't providing healthcare benefits, and not paying them enough to buy them on the open market, where exactly are honest, hardworking people supposed to GET them?
Butt, butt a few threads down Obama Care had already ruined the consumer. Make up your mind. I didn't know 40 million paying in on Obama Care controled the fortunes of the other 300+ million.
what does this contribute to CPI?
"Americans must be so busted they ALL must take my EBT card.
Cash? Kill 'em. PMs? Kill 'em.
If they vote anything but Democrat, we'll cut off their cards!
Right now, I am recruiting Monitors to accompany them into the voting booth to make sure they vote 'right'.
I will be the most Powerful Nigger in the world. YT will be petrified of crossing me!"
___666
The sickest people enrolled in this plan as they couldn't get insurance they could afford, It makes one wonder, was this a rouse by big pharma? A whole lot more drugs will be needed for these sick people, a whole lot more money for big pharma. A puppet government run by the rich, pull those strings and watch those puppets dance and prance.
As usual ZH is only partially correct: a very little at that. What is driving medical costs up is FASCIST MONOPOLY. A typical ZH (pea-brain) will rail against Socialist and Marxist government agenda--or so called Socialized Medicine. But the truth is that corporate influence drives political influence, which is Fascism.
What??? Sociopaths within the government lied, again??? OMG
Obamacare is a bachelor tax.
We've been lied to for years claiming the saturated fats caused cholesterol which cause heart disease . It was and still is thr fuck'en carbohydrates that's the problem , but the so call medical professionals are cluless . I'm in the best shape of my life, pill free, hospital free. Actually the last time I stepped in a hospital or any medical office for that matter was well
Over 13 years ago... And I eat plenty of Bacon assholes...
you can thank all that bread and garbage food prepared ... bread, cookies, desserts... round up wheat they dish out.
hormone injected beef, hormone injected poultry... get rid of it all, we wouldn't be sick.
Half my pedo patients are obese. I really mean half. I can remember in grade school, we always had "the fat kid." But the fat kid played sports and wasn't obese. The bastards are obese.
I wonder about the hormones. Certain benchmarks used to identify the age of young cadavers is being thrown out of whack. Bone and craniofacial development is coming earlier, along with the mounds of fat. Which is exactly why these hormones are given to livestock.
Wow. Thanks Big Pharma & Big Ag a Match made in Heaven equal to Big Chem and Big Petroleum.
- To Bad we don't have Honest Brokers in DOJ, FBI, SEC, FINRA, FTC, GAO, CBO, FED, Treasury, OCC, FSOC, BCFP, CFTC, FDIC, FHFA, SIPC... and USDA, FDA, AMA, US BAR Association
JAMA is supposed to be good, but heard that a British Medical Journal is better. Could be the British Medical Journal, BMJ, but not sure.
Diabetes is taking care of a lot of societies overburden already, diabetes used to be somewhat rare but today anyone without diabetes is becoming the oddity.
Not lied to, Bill. It was dogma based on ignorance. Heart disease results from arterial inflammation (and dna) which is primarily caused by insulin spikes.
So, enjoy your bacon, Bill. Have plenty of yolky eggs along with it. No carbs or insulin spike, and plenty of omega 3's. Say a quiet thank you for your parents dna. If they are alive, thank them personally.
Science ends where dogma begins. same as it ever was.
I loves me some bacon too but I avoid that part of the animal.
King Obozo is your master.
Kneel and serve him.
Niggerbama
Promotomg Dictarship since the TPP.
- 25.7 million foreign workers in U.S job market...
http://blogs.wsj.com/economics/2015/05/21/the-unemployment-rate-dropped-...
ACA codified a totally ficke dup medical system.
"Mission Accomplished"!
"Broke Donkeys" is what I hear some writers lable the Middle Class American consumer now. I see it almost every day at the store when people in front of me have their first, then second credit card purchase turned down so they are forced to walk out without the goods or pay cash.
Please refrain from using the word "insurance" in the context of medical benefits. Insurance is a hedge against risk. Insurers perform due diligence in assessing risk. Insurance is calculated on known risk.
There is no risk assessment in Obamacare. Medical "insurance" does not exist.
Sovaldi has the potential to break the backs of state and county correctional facilities. As a former correctional facility (jail) doc, my conservative estimate of HepC+ inmates is 25% (quite confident it is more.)
Hm, inmate population 7,000,000 X $84,000 Sovaldi tx per inmate . . .
Dear Amy,
Here I was all excited to see another female on ZH until I understood your very clever username. Nice!
"The amygdala is an almond shaped mass of nuclei (mass of cells) located deep within the temporal lobe of the brain. It is a limbic system structure that is involved in many of our emotions and motivations, particularly those that are related to survival. The amygdala is involved in the processing of emotions such as fear, anger, and pleasure. The amygdala is also responsible for determining what memories are stored and where the memories are stored in the brain."
TYRANNYCARE!
The video ads are killing this site
I agree. Works much better on a desktop
Hard enough multi tasking on my Ipad while burning spliff and sipping Maker's Mark. Now it is treacherous. Only way is to kill the page once the blather starts
The video ads are killing this site
Of course Loretta Lynch has to defend NSA spying and Regulating the Internet which will come out in TPP & TAP Treaties. It is Lynches Job to Defend what has been set up in her Agency not to immediately Deconstruct Domestic Spying.
- Maybe Lynch is learning what she gave up when she went to the Dark Side and signed on with the Devil
- FBI admits it hasn't cracked single terror case with Patriot Act snooping power...
- Lynch defends...
- Surveillance debate produces unusual alliances in Capitol...
- REPORT: FEC scraps plan to regulate DRUDGE...
- 'NET NEUTRALITY' FACES NEW FIRST AMENDMENT CHALLENGES...
- Obama's trade bill narrowly clears key Senate hurdle...
- To Bad we don't have Honest Brokers in DOJ, FBI, SEC, FINRA, FTC, GAO, CBO, FED, Treasury, OCC, FSOC, BCFP, CFTC, FDIC, FHFA, SIPC
Don't forget it puts severe limitations on buying and selling of ammunition.
Pres. (soon to be Emperor) Peace Prize:
"Fuck your second amendment, bitchez, I'll ban ammo."
download AdBlock. I finally did yesterday after a video was playing that would not allow me to page down.
aca, is excelerating the concentration of ownership..cvs buys ins co, now buys Omnicare a nursing home provider..owning the ins co means they capture costomers and force them to use cvs pharmacies..
antitrust laws are null and void..mega corps will take over healthcare by design..like monsanto wait for what aca brings in healthcare.
And they say we 'don't have a secret government'!!!
#$&%@*@*@
- Obama's trade bill narrowly clears key Senate hurdle...
- Deal details NOT released to public...
- Conservatives could push over finish line...
- Mexico weighs U.S. meat product sanctions...
- Congressional approval ratings collapse...
- OBAMATRADE SECRET AHEAD OF VOTE
I am just glad that:
I saved $2,500 - NOT
Kept my Doctor - NOT
Kept my insurance plan - NOT
My daughter could stay on my plan - NOT
Fuck Obama and Fuck all the Demorats that passed this stinking piece of shit legislation.